Foreign Policy

Trump Creating Jobs

Donald Trump
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A $600 smart phone might now cost $2,000

Ever since the election we Americans have been enthralled with what we might expect from a Donald Trump Presidency. Top of the list for most Americans is "jobs". So what might we expect? There are several ways to create more jobs in the US. All can have unintended consequences.

First one can place duties on foreign goods making them more expensive to the point that it is cheaper to make those goods in the US. The manufacturing sector would expand bringing jobs back to this country. This would have three consequences.

1. As US labor is much more expensive it would make goods manufactured in the US much more expensive. This would of course hit pocket books so any increase in wages would be offset by an increase in the cost of goods for sale in the US. A $600 smart phone might now cost $2,000.

2. Job losses in say Mexico would mean higher unemployment there and all the more reason to try to cross the boarder into the US. Pressure on the boarders would undoubtedly increase. Meanwhile this could also lead to civil unrest or even revolution which can also lead to unintended consequences.

3. As the pressure on prices from such retailers as Walmart is always downwards, companies forced to operate in the US would soon move to greater and greater automation. Automation is the major cause of job loss everywhere. The more sophisticated automation becomes the greater threat to more categories of jobs. What are we going to do with all those taxi drivers and truck drivers when there are driverless vehicles on the road?

Second. The Government can spend on such things as infrastructure. This would naturally increase the debt at least in the short term. Better infrastructure might pay off in the long term. The Government could also spend more on defense which would also increase the debt but would not pay off in the long term as defense spending is a pure cost. Government spending increases the debt especially if taxes are lowered. If the debt is already a problem as the Republicans are saying then more Government spending adds to that problem. So jobs now could spell fiscal disaster in the future.

Third, the Government could invest in industries it wants to promote. Though this smacks of 'picking and choosing" contrary to Republican fiscal dogma it has been used before and if the right industries are chosen can be a net positive. However if the Government chooses wrong, such as coal burning electrical plants the long term cost could be huge as the greatest cost the Government will face in the next few decades will be the cost of dealing with the effects of global warming. This cost would not only be the cost of damage from storms and drought but also shoring up coastlines to deal with rising sea levels and developing new water sources or conservation strategies. Global warming will also put great pressure on populations most affected and increase migration pressures towards areas less affected or better equipped.

What is striking about the policies espoused by Donald Trump is that in effect he has stated He alone can solve the problems so as he is Government he is actually talking the language of Socialism. As he has told his followers, 'the Government isn't working for them so now with him it will'. Sounds pretty socialist to me. As Socialist governments around the world have found out, the more you take on the more you are likely to screw up.

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Updated Jan 2, 2019 12:27 PM EST | More details


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